Oct 14, 1988

NO "S AND D" IN GATT DISPUTE SETTLEMENTS, SAYS NORTH.

GENEVA, OCTOBER 12 (IFDA/CHAKRAVARTHI RAGHAVAN)Industrialised countries have reportedly strenuously opposed the application of special and differential treatment concepts in the Uruguay round negotiations aimed at improving and strengthening GATT rules and procedures for settlement of Disputes.

The negotiating group on dispute settlement, chaired by Amb. Julio Lacarte-Muro of Uruguay, is to meet again on November 15 to agree on a report for the Montreal ministerial meeting.

At this week's meeting, the group had before it a proposal from Canada and ten others (Hong Kong, South Korea Uruguay, Australia, Hungary, New Zealand, Nordics, Switzerland and Argentina) intended to be a basis far an early agreement an this issue at Montreal.

Some third world participants note that while being indifferent to, if not blocking progress and early agreements an priority areas of concern to third world countries, the industrialised nations are trying to show cosmetic progress in the negotiations, particularly in areas where they don't have to contribute, such as in dispute settlement and functioning of GATT system etc.

Some of the Cairns Group members also appear to be going along with this approach, in the hope that this would enable them to secure early agreements at Montreal on agriculture, specially temperate zone products, where the U.S. is pressing the EEC far concessions and compromises.

Apart from the Canadian proposal (which was sought to be resented, contrary to GATT practice, as an behalf of a number of countries without identifying them), the group had before it a communication from Mexico, revising its earlier proposal, one focussing an the S and D treatment.

The group also had a revised secretariat note, outlining the existing GATT provisions, and procedures and practices in the area of dispute settlement, and separately various suggestions and proposals made in the group so far in discussions.

The Canadian proposal to make the paper a basis for Montreal would however appear to have met with resistance from some of the third world countries, including Brazil, India, Mexico, Yugoslavia and Egypt, all of whom underscore the omission in the paper of the basic concept of S and D treatment.

The concept enshrined in the GATT, and in the enabling clause of 1979, these third world countries contended, had been adopted by the ministers at Punta del Este as a basic principle for the entire negotiations, and could not be challenged.

Even currently, as a result of decisions of contracting parties in 1966 and 1979, there are special procedures in disputes involving third world countries and industrialised countries.

These include the invoking and use of good offices of the director-general for conciliating and settling the dispute.

A number of third world countries have underscored the need for additional provisions, including determination by a panel adjudicating a dispute involving a third world and industrial contracting party, about the compensation that should be provided to the third world contracting party concerned because of the damages caused by the actions of the industrial country.

Other ideas and proposals include those relating to the weak retaliatory power of third world contracting parties, and the need for joint actions by the GATT contracting parties to safeguard the interests of the weaker third world parties and ultimately to make the GATT dispute settlement processes themselves credible.

Industrial countries, and particularly the major trading blocs (U.S., Japan and EEC), as also some like Australia have been opposing such S and D treatment.

Some of them have even been arguing that while same third world countries might need "flexibility" and "special and differential treatment", so would same of the smaller industrial nations too.

Among the other proposals to benefit third world countries before the groups are those far provision of outside legal expertise and technical help to enable third world contracting parties to plead their case before any GATT adjudicating panel.

The U.S., Canada, EEC and Japan among others have been arguing against what they call "blanket S and D treatment", and offering to consider a "case-by-case approach" in these matters.

An argument advanced far doing with s and d has been that there have been very few instances of recourse by third world countries to these special procedures.

However other third world participants have contended that with increasing violations of their rights by the industrial countries, and the blatantly discriminatory restrictions and threats used against them by the major industrial nations, third world countries would be forced more and more to have recourse to the GATT dispute settlement procedures unlike in the past.

Among the issues before the negotiating group, but which by common consent seems likely to be put off for consideration and negotiations after Montreal, is the issue of whether parties to a dispute could be permitted to block adoption of panel reports and recommendations by contracting parties, by withholding consent to consensus adoption of panel reports and recommendations.

There have been suggestions that while GATT practice of decisions by consensus should be maintained, in the case of adoption of panel reports and recommendations, the parties to the dispute should be excluded from the decision-making by consensus processes.

The chairman of the group is now expected to attempt to prepare a paper of his own, and hold informal consultations with delegates, prior to the next meeting of the group on November 15.